FCCL_FY22 Analyst Briefing Takeaways,(AKD Off the Analyst's Desk Oct 18,2022)
FCCL: FY22 Analyst Briefing Takeaways
Fauji Cement Company Limited (FCCL) held its analyst briefing today to apprise investors
of the FY22 result and its future outlook. To recall, FCCL posted a PAT of PkR7.11bn (EPS:
PkR3.26), up 29.4%YoY. To highlight, FCCL posted a PAT of PkR3.05bn (EPS: PkR1.4), up
57%YoY in 4QFY22 owing to a strong GM of 25.5% during the quarter.
In FY22, cement dispatches stood at 5.6mn tons post-merger compared to 3.5mn tons
in FY21, cumulating an increase of 60%YoY in FY22. Moreover, local sales stood at
5.3mn tons, up 66%YoY in FY22. On the export front, sales stood at 0.31mn tons in
FY22.
The company has a current total captive power plant capacity of 89MW which comprises of Solar/WHRPP/Thermal Power of 28/40/21MW. Moreover, the expected expansion is likely to bring the total power mix to 114MW. Commenting on sustainability
measures, FCCL currently deploys green energy sources that meet 45% of the total
power requirement. Furthermore, FCCL also accumulated 90,005 tons of carbon credit
as well in FY22.
Currently, Afghan coal is procured at PkR53-55k/ton while local and afghan coal mix
stands at 70% of the total fuel mix, with 30% being covered by imported coal.
Moving forward, cement sales are expected to decline by 10%YoY in FY23 while export
sales are also likely to decline. Moreover, the margin on local sales is likely to remain on
FY22 levels with efficient inventory management enabling the company to currently
hold coal at PkR43-44K/ton.
The expansion of 2.05mn tons at the Nizampur plant is on schedule and expected to
come online by the end of Nov’22, with a total CAPEX of PkR27bn and a Debt/Equity
ratio of 63%/37%. Moreover, expansion in DG Khan’s Greenfield project of 2.05mn tons
with a total associated Capex of PkR32.4bn and a Debt/Equity ratio of 63/37% is also
likely to come online by the 3QFY24. The said expansion is expected to take the total
market share of the company to 14% from 8% by the end of FY24, making it the 3rd
largest player in the country.
AKD Securities Ltd. is one of the leading securities firm in Pakistan, providing a comprehensive range of investor focused services, including equity brokerage, economic and securities research, investment banking and financial advisory services. AKD Securities accounts for more than 6% of the average daily value of the Karachi Stock Exchange. AKD Securities was the first brokerage house to launch an online trading platform in Pakistan in November 2002 and now has the largest market share with over 6000 customers. This has helped diversify and expand the retail investor base in the country and ushered in a whole new universe of investors to the stock market.
AKD Securities Ltd. caters to a diversified group of domestic and international institutional investors, high net worth individuals and upscale retail clients, including expatriate Pakistanis. With high quality research, unparalleled execution and distribution capability for both regular and large block trades, AKD Securities Ltd. has earned an outstanding reputation in the Pakistani securities industry.Outside of commercial banks, AKD Securities Ltd. is one of the biggest capital market firms in the country. AKD Securities is the leader in raising and providing risk capital in underwriting, market making and mergers and acquisitions in Pakistan. Good corporate governance and professionalism are emphasized throughout the firm and AKD Securities Ltd. is amongst the very few companies to have introduced a firm-wide comprehensive CODE of ETHICS, overseen by an independent compliance manager.Ultimately, our success is based on the quality of service we provide to our customers and the trust and confidence reposed in us by them. Our focus, therefore, remains on customer satisfaction at all levels in the company.
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